|Shares Out. (in M):||368||P/E||14.0x||13.0x|
|Market Cap (in $M):||21,585||P/FCF||13.0x||12.0x|
|Net Debt (in $M):||5,000||EBIT||2,766||2,950|
Sign up for free guest access to view investment idea with a 45 days delay.
M Write up
March 14, 2014
Current Price: $58
Target Price: $74
Worst Case Target: $50 (and I’d be a big buyer there.)
52 Week Range: $41.58-$58.94
Average Liquidity: 4.4MM shares or $255MM per day
Trader Talk: Quality business at a reasonable multiple with underappreciated competitive advantages
If you want an exciting, imaginative special situations play with 3x upside in the next six months, this is not it.
If you want a beaten down, hated name with a brilliant contrarian call, you’re going to want to pass on this.
If you love exciting GARP stocks with big TAMs, this will bore you to tears.
But if you want a reasonably priced stock, returning cash to shareholders, with strong competitive advantages, that will continue to compound and has very little downside over a period of time, you might like Macy’s.
Macy’s Inc., which owns Macy’s and Bloomingdale’s, is a high quality department store operator that continues to execute and is uniquely positioned in US retail yet still trades at a below market multiple. Key to understanding Macy’s competitive advantage is their significantly higher revenues compared to other department stores. This scale advantage gives Macy’s significant leverage over their vendors, resulting in gross margin consistency and operating margin expansion. Further, their scale, combined with their strong consumer image, gives Macy’s access to key brands that competitors (like KSS) don’t, such as Kors and Ralph Lauren. Macy’s also is significantly ahead of the competition in online retail and have already consolidated their store base.
Poster Note: M is amply covered by the sellside, so I will not focus on near term numbers besides to comment “they look reasonable and I don’t really care anyways.” The remainder of this write up will focus on the structural advantages M has that are unlikely to fade away anytime soon.
The Current State of Retail vs. M
Scale vs. Vendors
Access to Key Brands
|show sort by|
Are you sure you want to close this position MACY'S INC?
By closing position, I’m notifying VIC Members that at today’s market price, I no longer am recommending this position.
Are you sure you want to Flag this idea MACY'S INC for removal?
Flagging an idea indicates that the idea does not meet the standards of the club and you believe it should be removed from the site. Once a threshold has been reached the idea will be removed.
You currently do not have message posting privilages, there are 1 way you can get the privilage.
Apply for or reactivate your full membership
You can apply for full membership by submitting an investment idea of your own. Or if you are in reactivation status, you need to reactivate your full membership.
What is wrong with message, "".